Back to full employment?

I’ve been arguing for some time that the government should use the current period of strong demand to make a really strong push to reduce unemployment, particularly long-term unemployment. This piece in the Australian looks promising, though on reading closely it’s hard to see whether there is actually a serious commitment of funds and effort or just another rearrangement of the existing programs. If the government was willing to put the kind of money it’s repeatedly splashed around in tax cuts into a program aimed at driving the unemployment rate down to 2 or 3 per cent (by putting people into jobs, not by pushing them out of the labour force), they would win my support.

JQ, do you seriously believe the governments figures on unemployment?
By counting those doing as little as 1 hr per week as employed (I think that figure is right), discouraging many others from seeking work, transferring others from unemployment benefits to disability support benefits, the current figures are more a reflection of successful cooking the books than a genuine 5% unemployment rate.
I am not a practicing economist witht he figures readily available to do the analysis so rely on others like yourself and Tim Colebatch in The Age and Ross Gittins in the SMH to expose what is really going on.
I recall Colebatch not so long ago estimating that the true rate was 2 – 3 times the ‘official’ rate.
The claimed low unemployment rate fits neatly with the ‘skills shortage’ (AKA ‘failure to train’) to justify bringing in compliant workers from overseas on short term contracts to drive down wages.
Surely you haven’t fallen for this?

I have an idea for reducing unemployment: abolish government wage setting (unions are ok, but only if both sides are allowed to have them) and let labour be sold freely like other goods. Best thing is that it won’t cost a penny!

Sounds good, Joseph. But what about people with very low skills who cannot get wages at a level required to feed, clothe and house themselves and their families. It’d be OK if the government pitched and topped up incomes where necessary. But how to do you subsidise a proper standard of living without creating a massive incentive for employers to pay below market wages?

“Reality is: Staff are almost impossible to get, it is a sellerâ€™s market, however sellers who have what the buyers want are VERY rare.”

Sounds like the dreaded ‘skills shortage’ (AKA failure to train).
So where are the labour market programs to train up the unskilled or those with skills no longer in demand?
A bogus ‘skills shortage’ was used by many Australian companies to exploit the 457 Visa scheme and drive IT unemployment even higher by replacing Australian IT workers, including migrants, with indentured, compliant workers who were paid far less than the Australians they displaced and expected to work incredible hours.
The result? IT courses now find it hard to get Australian students and are increasingly dependent on overseas students. Less Australian graduates and the prospect of a real ‘skills shortage’ emerging.
The ‘failure to train’ is the real problem. Any genuine skills shortage is merely the symptom.

“If the government was willing to put the kind of money itâ€™s repeatedly splashed around in tax cuts”

Nobody has had any tax cuts. Per capita taxation and total taxation as a percentage of GDP is constantly rising- even with the recent bracket creep adjustments.

The real number of people capable of working, but who are not hasnâ€™t changed for 15 years. The way unemployment is defined over that period has changed. The reduction in the unemployment figures equal the increase in sickness benefits claimants.

If you want to get the bludgers to work abolish the dole and give them food stamps.

If we want 2% u/e, tax credits are a better method of generating equity than significant re-regulation of the labour market in the service industry.

I think Beazley has potentially lost the election at the NSW conference: he should have said we will recognise unions right to enter a workplace to recruit and bargain based on an individual request and/or a majority at the workplace (for a collective agreement), and lifted the allowable matters, but complete removal of AWA is not only impractical but inappropriate for the service industry. As an example, unlike many I think penalty rates have been abused in Australia – but complete removal was probably going too far – very tough!

The Fair Pay Commission is also potentially a better vehicle than the AIRC for setting minimum wages – as I think you’d agree – the unemployed have as much interest in wage levels as the employed.

I’m sure I’ll cop it for that, but hey there are too many vested interest in this area for either side to really make good policy on IR.

There is a logical tax-transfer approach that in many ways mirror the Accord that is fairer and better at generating work than either of the major parties policies.

I think the supposedly good news on jobs contains the seeds of a looming clash. The figures hide underemployment in terms of inadequate hours and deskilling. Secondly I wonder if the ‘can’t get good staff’ line is a convenient myth in which employers and government are complicit. It thereby justifies guest worker programs and outsourcing as opposed to training, paying higher wages for onerous conditions or taking on staff with nonstandard backgrounds.

Apart from this potential boilover I’ve noticed something else; guest workers interviewed via translators convey the clear impression they think it is the first step to permanent residence. Another sleeper.

AWAs are one type of individual contract. In 2002, though they covered only 2 per cent of the total workforce, they covered 19 per cent of mining employees and 13 per cent of communications employees. They were also disproportionately common (though still only covering a small percentage of employees) in finance and insurance, property and business services and government administration. In the latter, they were used particularly for senior executives. Because of this, managers and administrators were one of the two occupational groups with the highest incidence of AWAs; consequently in the Australian Capital Territory, where most senior federal public servants work, hourly earnings of employees on registered individual contracts were 43 per cent higher than those on registered collective agreements. In addition, a lot of supervisory employees are put on AWAs or other individual contracts (for example, in communications) but these workers are not categorised by the ABS as â€˜managers and administratorsâ€™. Unregistered individual contracts cover over ten times as many workers as AWAs. Unfortunately, there is less information about their effects.

So 2% of workers were on AWAs before the new legislation, and most of them highly paid because they were either in short supply in mining or communications, or were senior management.

Your dictionary must have strange defintions of “impractical” and “inappropriate”.

No, my argument was limited to the “you’re wrong” bit. That was the only potentially factual content in your comment, as far as I could tell, and it was wrong. The rest of it was just your opinion, from your lofty vantage point in London. And, well, if you don’t know the basic facts, what’s your opinion worth?

Done your homework on me – I guess you have no opinion then – nor identity. Be a man SJ – reveal yourself in your lofty vantage. Otherwise your just another smart guy aren’t you – with nothing else on offer.

Questions:

What’s wrong with labour flexibility (better and fairer than Howard – see above) matched up to tax-transfers to create jobs, incentive and fairness?

This is the optimum policy setting for getting 2% u/e. Tax credits with an appropriate method of phase-out for welfare are the best means of reducing the crushing EMTR’s on welfare to work.

By the way I also agree with education for long-term jobless so this is no replacement policy.

If u/e keeps falling the ALP will lose seats as Howard will have one hell of ascare campaign to use: think of what business will say.

Bemused & Hermit clearly are talking in the abstract. Anybody who has tried to hire staff in the past couple of years would not be talking as they are.

Neither of you know what you are talking about.

You believe that skills shortage is bogus? or a myth? Please type for us where you think the moon landings were faked at, where you think Elvis is living, and how much you will pay for Sydney Harbour Bridge.

steve at the bar- I can supply evidence of a job ad or two that attracted 50 plus applicants.

The skills shortage is lumpy and geographic as well.

It is impossible to find a carpenter here in melbourne but it’s also impossible for someone to get a carpentering apprenticeship. Shortage of nurses, no shortage of cleaners. Can’t find a sparkie for love nor money. Lots of unemployed PhDs.

My son tells me theres a big shortage of good drummers, plenty of bad drummers, I told him thats always been so. Shortage and good and bad bass players.

As long as there are good or even fair incentives for people not to work or to work less than they otherwise would (like “topping up” someone’s salary as was mentioned above), people won’t work as much.

What’s worked well in the US is giving people a time limit, letting them know that they can have help for some period of time, but not forever. Not if they’re able-bodied.

What I’d be interested in knowing is an estimate of the number of people in Australia who actually want to work but cannot find it, which seems to be a better determinant than just the number of unemployed.

…Hit Submit too soon… but, since only a few people can support themselves in any reasonable degree playing any instrument, your drummer/bass player will probably need a day job for much of his/her life, so that doesn’t address the unemployment problem much.

“Bemused & Hermit clearly are talking in the abstract. Anybody who has tried to hire staff in the past couple of years would not be talking as they are.”

Well I do like to be acknowledged as an abstract thinker but there is a solid base of empirical evidence for what I say.

We are, under the inspired leadership of ‘honest John’ & ‘Peter the smirk’, working hard on creating a skills shortage by ‘failure to train’ and by allowing some employers to shirk any obligation to Australian job seekers by bringing in short-term indentured workers who can be relied upon to be compliant and accept bare minimum rates (or less) and whatever other conditions are imposed.

This process is probably most advanced in the IT field where at a time of record unemployment in that sector, there were claims of a skills shortage which was used to replace Australians with 457 visa holders. I referred to this previously.

Part of the scam is for employers to insist on improbable skill mixes so they can say they had found no-one locally who could do the job. Next thing a foreign graduate, with no experience to speak of, and a 457 visa is doing the job while Australian IT graduates couldn’t find jobs in their chosen field for which they had qualified.

Perhaps the best rejoinder was an email sent to Graeme Philipson (Age & SMH columnist) which concluded PI9017]”I will only believe there is an IT skills shortage when you start to see jobs advertised that say something like `Skills Required: Network Admin (any) RDBMS (any), Unix (any flavour), OOP (any) – Will Train’. I have never seen any ad like this, even before the current slump.” Testimonials put the lie to the myth of IT skills shortage, By Graeme Philipson, July 16 2002, The Business Review Weekly

Now Australia Universities struggle to fill IT courses (AFR 16 Jan 2006) and we are on the way to a genuine self-generated IT skills shortage.

Were it not for the human tragedies involved I would feel a certain sense of schadenfreude.

Bemused, if Australian companies employ people from outside Australia then they cannot find a better domestic applicant by definition. Australia has a proud tradition of importing foreign workers and a dark past of racism against them (returned to recently with ALP/ACTU dogwhistle scares). Iâ€™m not calling you racist, but consider your argument resonates with those who are.

Joseph, please read some of the work done by Bob Kinnaird. Go over some of Graeme Philipson’s columns on this topic too.

I am not against genuine immigration from anywhere and I would add that some migrants are deeply resentful of those they see taking a ‘back door’ and undermining ther status as bona fide migrants who met rigorous selection criteria.

These ‘indentured’ workers on 457 visas are in most cases being exploited and I do have some sympathy for them.

The definition for ‘better domestic applicant’ that seems to be applied is that they are prepared to take a 20-30K salary cut and increase their hours of work by at least 10 – 15 hours per week. Yep, this offer has actually been made in some companies.

In many instances Australians have been sacked after training their cheap 457 Visa replacements.

It all fits in nicely with workchoices and the ideology of cost cutting as opposed to productivity improvement. Productivity improvement is driven by investment and training.

oops sorry Helen. Didn’t see you there. I think they want Keith Moon or John Bonham loud pyrotechnics with the skill of Gene Krupa and simplicity of Charlie Watts.

Oh and being a drummer for them would add to the unemployment problem.

Do female skin tappers curse Karen Carpenter as perhaps the highest profile thumper of that gender? Maybe the younger people haven’t heard of her and think Meg White?

I notice COAG is going to do something about Apprenticeships and training, but it does look like a little fiddle around the edges.

Its a weird situation where a person labouring on a chippie can earn 4 times what the apprentice will earn for doing much the same thing. There needs to be a staged qualifications system for the trades so that there are articulated graded qualifications. I don’t understand why we still have the centuries old apprenticeship system which assumes all apprentices are 15 years old illiterate simpletons who sleep under the workbench at night and live on gruel and scraps.

Joseph Clark, discussing immigration numbers is not racist. Temporary worker programs in particular have very little to do with immigration, and huge potential for abuse.

One of the problems of temporary worker programs is that they facilitate forms of discrimination against local workers, including age discrimination. Paradoxically, perhaps, migrants suffer from this and, overseas, are some of the strongest critics of temporary worker programs like the US H1-B visa.

An introduction to this can be found in Matloff’s US work, which applies equally to the Australian context.

In the Australian context, Kinnaird points out that IT graduates faced unemployment rates of 30 percent over the years 2000 to 2005, and that their starting salaries declined from $40,000 in 2001 to $38,000 in 2004. Those figures are not consistent with shortages.

Workers who come to Australia on 457 visas or otherwise believe that they are better off than their outside option. Employers who employ foreign workers (457 or whatever) consider these workers better (by whatever measure they use to decide) than what they can find in the domestic pool. The term `exploitation’ is completely meaningless in this context.

1. The very popular perception that when foreign worker comes to work in Australia they take the job of an Australian worker. This perception is wrong.

2. The belief that foreign workers are ‘exploited’ by coming to work in Australia on temporary visas. This requires that the worker is acting against his own interests by coming to Australia.

3. The idea that companies employ foreign workers in preference to better qualified Australian workers (wages notwithstanding). This requires that the companies act against their own interests.

4. The argument that if you increase the labour supply by allowing foreign workers to participate in our labour force there will be a decrease in the wages/conditions of Australian workers. This is more credible, but it comes down to a simple protectionist argument that we should not allow foreign goods into the country because they compete with domestic goods.

Most of these arguments are something much simpler: discriminating against people on the basis of where they were born. This is also called racism.

On Quiggin’s orginal post, the problem with these schemes is they just lead to queue jumping. They allow those who recieve the assistance to jump ahead of those who don’t, without creating much increase in aggregate employment. A much better way to acheive this, as other posters have identified, is to make the labour market more flexible. In any case, surely a job (even if it is low wage) is better training than any government funded program.

On the immigration points, who cares what effect immigrants have on local wages. They are such a small part of the market it is going to be very small in either direction. They will, however, lead to some losing their jobs, but again the best response is to make the market flexible so that the ‘losers’ can find other work. Look at the Beaconsfield miners. Most of thees blokes will end up on $100K+ AWA contracts working 5 days on/5 days off in the regions. Yep, livin’ in Howard’s Australia is real tough!

It’s perfectly fine with me if we have completely open borders. But let us stop this selective openess that is nothing more than subsidies for weak businesses.

For example, the 457 scheme lets labour hire businesses compete against and undercut the professional local workforce. It is also an essential part in the operations of the Indian offshorers and thus assists in the exporting of Australian jobs to India. (See Hira.)

At some stage, government will have to consider the end game. Why do we spend millions protecting our fishing industries while assisting Indian firms to take our software jobs? DFAT used to run invitation-only seminars promoting the use of Indian firms.

Also, when we refer to migrants, we mean permanent migrants. Migrant doesn’t just mean someone from another country. Migrants suffer from temporary worker programs for the same reason that locals do – they get displaced from their jobs. Indeed, they usually have a much better understanding of how it all works than do the locals.

Re your points, quickly –

1. Most 457 holders are under 30 and by definition accept a job in a company. They do not create jobs.

2. This is a wash. Some are and it should be stopped.

3. You ignore the role of competing businesses such as labur hire firms and offshorers.

4. By about 20 percent.

No it’s not racism. Racism means discriminating against people based on their race. As I pointed out to you, migrants (people born elsewhere) are among the critics of temporary worker programs.

To Steve the employer, complaining he can’t get good staff: what planet are you on? (Plainly not Melbourne, or anywhere resembling it.)

To those who assert that there’s plenty of even unskilled work in outback mines, yada yada. So if one million plus (unemployed plus DSP-malingerers and misc working-age NILFs) male job-seekers descend on the outback tomorrow, there’ll be work for us all? Yeah right.

“Most 457 holders are under 30 and by definition accept a job in a company. They do not create jobs.”

Mate, you gotta be kidding me. If, as you say, these workers undercut wages they will for sure create jobs because they will lower costs and make goods cheaper. This will raise the ‘income’ of all those who consume these products, allowing these people to spend money on more other goods (or more of the same good) and thus creating jobs.

You’re not far from suggesting that we should all go and break some windows thus creating more glazier jobs.

On what basis does the FPC provide a better vehicle for setting minimum wages than the AIRC Corin?

Perhaps you should do a little research before you rush to print with ecomiums designed to illustrate your ‘flexible’ approach to current debates. FYI, the AIRC is open to the public and accepts submissions from all parties including government. The FPC by contrast, is not required to hold ‘open hearings’, publish reasons for decisions, and has been stacked by government appointees, one of which is a broken down old Grouper who used to masquerade as a union official in one of Australia’s less successful unions. Oh and BTW Corin, individual businesses are interested in profits, not productivity, and a lower minimum wage will lift profits, but will in fact lower overall productivity over time. As to eliminating unemployment, I wonder what dreadful moral virus suddenly infected the Australian people between say, the mid 1960’s when u/e was around 1.5% and now, when the lazy bludgers apparently just won’t get off their backsides and work eh?

Now to the issue of 457 visas. These visas are explicitly designed to ensure that employers have a compliant labour force who are tied to the employer not by good benefits, conditions and wages, but by the little inconvenience (for the worker) that their visa may be cancelled at any time by the employer if they give any lip or cheek. One result of this subsidy to employers is the return of indentured labour. A young man was bashed, held against his will and paid $5.00 an hour by an employer in the Construction industry recently. He hails from the Pacific. His plight was discovered when he was taken to hospital with brain damage (permanent) after a particularly savage beating.

If we have a genuine skills shortage then we can lift the migration program. No-one I know has any problems with immigration from anywhere at all. But I and many others have a problem with a policy which detaches political rights from the labour force the country presumably requires, and that is precisley what the current scheme is deliberately designed to do. Once you detach the labour force you need/require from the franchise, you have returned to a system of indenture, and thus the threat is not simply to the wages and conditions of the indigenous labour force (which BTW includes thousands of migrants, both recent and not so recent), but contains within it, a clear and real threat to the civil and political rights of both existing citizens, and those who are brought here to work under these conditions. It is irrelevant whether the wages such people earn are more than those they could earn at ‘home’. The point is that the scheme detaches civil rights and obligations from the employment contract.

It is a scandal and a major public policy **** up, which ever way you look at it.

SATP, if you want proven pub workers, you can always offer jobs to people who are working in other pubs. You can even check them out by seeing how good they are at serving customers.
Of course to attract them you will have to pay them more than they are getting now. But that’s what happens when there are labour shortages. It’s a seller’s market.

Following on from Uncle Milton.
If SATP is paying more for his better quality workers he and they will have an incentive to work together to improve productivity so that higher than average wages can continue to be paid and SATP can get an even better bottom line.

They might look to improving the way work is organised, some capital investment on better bar equipment etc.

A much better way to go than the cost cutting ‘screw the workers’ path as implemented in workchoices.

Folks might like to recall the media campaign last year about the urgent need to import 10,000 Chinese fruit pickers for the Sunraysia region, especially to pick the region’s grapes. Like all these campaigns, that one was driven by the labour hire firm that would pocket the margins from renting out the Chinese workers.

A mere 12 months later we see that there’s actually a gross oversupply of grapes and that one growers association now wants $60 million from the government to pay growers not to pick their grapes.

Even DEWR >a href=”http://www.aph.gov.au/Senate/committee/eet_ctte/contract_labour/submissions/sub030.pdf”>argues against the need for guest workers in the region.

“It is important to consider why reports of harvest labour shortages are generally exaggerated. These stories can be generated by growers as a means of attracting more labour to a harvest area and are not necessarily indicative of actual shortages. With no concrete evidence of actual shortages, these stories might be generated by interested parties to strengthen support for the introduction of unskilled agricultural visas and guest worker schemes.”

“By the way, if anyone out there needs a job, some of the mines in the north of WA are hiring dishwashers at nearly 100K p.a. Move over, we need the labour. Please.”

Huh? I thought that you were a risk expert, Andrew. If you understand anything about risk-management from an unemployed person’s POV, it’s that income security is much more important than income quantum.

Thus, moving 5000 km for the possibility of a high-paying job carries a substantial risk of one’s being worse off (compared to staying put on the dole), in both the short and long-term.

If there really are unskilled jobs at the wages you speak of, filling them with unemployed people like me should be a cinch. I’d wash dishes anywhere for $30k, but on condition of housing security (and, in inflated property markets, housing subsidy) *and* job security (a minimum ten-year contract).

That supposedly desperate-for-staff employers never offer such packages in reality reinforces how flimsy their supposed labour shortage is.

An employer can (I assume) buy insurance to cover long-term employment contract liabilities (should the business go sour), but for an unemployed person, the dole *is* their insurance, also.

What rubbish, Paul. No, employers cannot buy such insurance – such a market would never work because of the adverse selection problem (only bad risks would take it out, and the premiums would reflect this, which means only the very worst risks would take it out, which pushes the premiums up further, which means … etc).

And are you seriously demanding a ten year contract and someone to give you a house before you deign to consider a job offer? If so, I want my dole money back from you!

He was saying that he would not be prepared to make a move 5,000 km away to the remote regions of Western Australia without guarantees of security of employment and afordable housing. Given the removal of legal guarantees protecting the working conditions of Australian workers and the growing trend by unscrupulous employers to use imported labour to replace Australian workers at much cheaper rates, one would be foolish to base one’s long term future on the said jobs allegedly going at $100,000 PA.

James,
I was directly responding to comments about low wages. If you have a good work ethic and a reasonable employment history there are enough jobs going in Perth. Granted they do not pay 100K for doing dishes, but they pay well and housing in Perth is cheaper than Sydney (if not as much as it used to be).
The condition of 10 year contract is a nonsence, Paul. I have not worked for 10 years for any employer and possibly never will. If employment was only provided on those terms there would be no jobs at all – who would employ anyone on those terms?
If you want a housing subsidy, that would be part of the wage – so it is not really 30K is it. In any case, the 100K salary is after housing costs as on site housing is provided.

Still Working it Out:
* Appropriate formal qualifications: Tradesman Chef = the one job for which my staff need formal quals. Applicants tend to have their papers.

* Length of Experience: Chef & management applicants usually have sufficient experience. However 80% of bar staff applicants are greenhorns in the industry, compounded by them never having encountered yakka in their life.

* General Competence & Drive: This is the main problem. Abscence of these qualities regrettably seems to be the default scenario for job seekers I encounter.

*Something Else: Reliability. Lack of both drive & reliability seems to be more common. Not only in my industry, other industries I deal with report similar frustrations with quality & reliability of staff. Eg, Accountants, Motor Dealerships, Butchers, Taxis, Banks.

If you have a good work ethic and a reasonable employment history there are enough jobs going in Perth.

The implication I draw from these sorts of posts is that those of us who don’t have good jobs, who are unemployed, or stuck in dead-end low skill jobs, are there because they don’t have a good work ethic.

Speaking for myself, I have made a total of 7 inter-city moves including 4 interstate moves since I was retrenched from my job in 1994 in order to complete my tertiary education and to find work. In spite of this, I have had to accept unskilled low-paid insecure work to earn my income.

Just possibly, the solution for people in my circumstances does lie in packing my bags, yet again, and making the 6.000km move across to Western Australia, away from family, friends and familiar surroundings.

However, given that housing prices are skyrocketing and that there doesn’t apppear to be sufficient water or other natural resources to sustain Western Australia’s current population and given that much of the growth in Western Australia’s economy is based on the unsustainable extraction of non-renewable mineral resources, which are fed into overseas industries which are threatening the planet by polluting the earth’s atmosphere, soil, rivers and oceans and accelerating global warming, others should not too judgemental if I choose not to jump at this opportunity.

In any case, just how secure are those high-paid unskilled jobs in Western Australia’s mining regions, if they truly exist? A speech by Independent MP Bob Katter in Parliament on 23 May bears repeating:

… I sat on an aeroplane with a gentleman who represented a company that did maintenance work on particular machinery. I will not betray his confidence. They employed about 20 or 30 people in Australia. I asked, â€˜How do you get people to go out to these isolated mining situations?â€™ He said, â€˜It was very difficult
until you blokes liberalised the immigration laws.â€™ He said: â€˜Now, of course, it is very easy. Half of our employeesâ€™â€” that is, 15 peopleâ€”â€˜are now Indonesians.â€™ He said jokingly to me: â€˜You donâ€™t have to worry too much about them. They do not put much pressure on you about conditions and those sorts of things.â€™ No.
They are prepared to work for nothing! What about the Philippines rural wage?

…
The important point of this is: people work there for
nothing. The wage in the Phillipines for agricultural
workâ€”as this man from regional Australia would
knowâ€”is $2.70 a day; ours is about $15 an hour, and it
is pretty poor pay for the work that they do but it is
good, compared with what they get in Indonesia. So
this company, quite predictably, is bringing workers in
from Indonesia. What that is going to do to the wages
and conditions in this country scares the hell out of me.

I just heard on the news that John Howard has, yet again again declined Kim Beazley’s challenge to publicly debate the Government’s Industrial relations legislation. By my count this is at least the third time he has declined to publicly debate the so-called ‘Work Choices’ legislation that wasn’t even put to the Australian electors in 2004.

Here’s some of the earlier ABC news item which reported Beazley’s challenge :

Beazley challenges PMto public debate on IR

… Mr Beazley has told Channel Ten that Mr Howard should have the guts to debate him publicly on industrial relations.

“He can get up in the bully pulpit of Parliament where he has got everything weighted in his favour and say all he likes,” he said.

“If he really believes that he’s defending the aspirations of middle Australia he should have the guts to front me in a decent debate before the Australian people.”

Indisputably the ALP er… “misled” us people about the severity of the case.

Particularly notable is that nowhere was it mentioned that it was the idea of the employee herself to scrap the award conditions when it suited her. Thus spotlight was not so far out of order to suggest formalising a few changes.

James,
It is just as well that every single change to Australia’s workplace relations made by the ALP has improved the lot of every single working (and non-working) person or your case would be looking a little thin (sarcasm off now).
Any change is going to introduce some anomalies, just as the promise made by Beazley to withdraw AWAs if he wins government will hurt many of those currently on AWAs. Any focus on individual cases is just as silly a debating point if the government pointed out one of the negotiations (or impositions or whatever other terminology you want to use) where the workers ended up notably better.
On the previous note about resources. I think you contend that very little of our current society is truly sustainable, therefore almost any job you take would be exploitative of our environment and not, therefore, for you. I think this is a silly hurdle, but this is a seperate argument. Perhaps if you resolved your internal “deep green” (to use PrQ’s term) squeemishness you would find a job a little easier to find off a commune somewhere.
One other question – are you in New Zealand? Perth is somewhat less than 6000km from anywhere in Australia.

It is just as well that every single change to Australiaâ€™s workplace relations made by the ALP has improved the lot of every single working (and non-working) person or your case would be looking a little thin (sarcasm off now).

Huhh?!

I don’t believe that I could fairly be accused of being an uncritical supporter of the Labor Party.

Nevetheless, I believe in giving credit where credit is due. If Kim Beazley is going to fight Howard of the issue of the Industrial relations legislation, instead of supporting him, then good on him.

If Howard is so confident that his IR legislation is so much in the best interests of the public, then why won’t he simply show the public were Kim Beazley is wrong by accepting his challenge for a public debate?

Andrew Reynolds wrote:

Perhaps if you resolved your internal â€œdeep greenâ€? (to use PrQâ€™s term) squeemishness you would find a job a little easier to find off a commune somewhere.

I am not that squeamish that I would not accept one of the $100KPA jobs you say are on offer in these environmentally harmful industries, assuming that I could look forward to, at the very least, one year of secure employment, with prospects for career advancment, that I could continue with other interests in life, through, for example, the availability of the Internet and a reasonable amount of leisure time and that there are no hidden catches.

However, I wouldn’t pretend to myself, or to anyone else, for a minute, that my occupation was not contributing to an industry that was greatly harming the prospects of our children and grandchildren for a decent life, and (I hope) I would still strive to change the direction of our society so that we would not find it necessary to earn a living in this way.

Scrapping the practice of paying people to NOT participate in the workforce. (A competitive price wage and benefits paid to people for not working is always going to attract a segment of the population who find honest work to be too strenuous.)

… and public opposition to the Industrial Relations laws, in spite of the propoganda from our ‘news’ media and the fraudulent and extravagent taxpayer-funded $55 million ‘Work Choices’ advertising blitz of last year, is even higher according to the AC Nielsen Poll.

He can easily sway a good many of the public, by preaching from his bully pulpit in Parliament or in stage managed media conferences and ‘interviews’, the kind of nonsense peddled by yourself on this forum, but it would be an entirely a different matter, if he were to be forced forced to have his case properly tested before the viewing public in a fair debate.

If that were ever to occur, the Coalition would be struggling to attain a popularity of even 20% in the opinion polls.

There have been two outcomes from offering higher wages:
Significant increase in the number of applicants,
People applying from much further afield. (eg, uni students in Canada & USA applying for my bar jobs)

Most of this new demographic of applicants are completely & totally unsuitable (eg, 16 year old girls still in high school in Melbourne) Possibly half of responses are looking at only the wages offered, without the applicant considering whether they are qualified or competent, or where the job is located or what tasks they may be required to perform.

In summary: The competence of applicants has not been improved by offering higher wages. The average standard of applicants is dropping regardless. All in all, I am paying more for a lower standard of employee.

‘steve at the pub’, your post is bizarre! You get a wider pool of applicants by offering higher wages, but, you say the quality is no better, and you end up with a lower standard of employee? Therefore the implied ‘solution’ is to go on paying low wages?

Just how ‘high’ are the wages on offer, anyway? … and how ‘high’ are they in comparison to normal wages offered in the industry? I hear that wages in most pubs are pretty abysmal, these days, especially considering the high costs of living in the larger cities. For that kind of hard demeaning work, I would expect to be paid exceptionally well.

However, in regards to company CEO’s, especially the current imported CEO of Telstra, I can agree with you that higher wages certainly don’t seem to improve the quality of the employee.

Er… I only posted the reality of my experience, to answer still-working-it-out’s question. I was speaking only of my bar job vacancies.

Yes, I did say that offering higher wages has NOT improved the standard of applicants. This has been my experience.

There is nothing bizarre in this. Offering higher money for anything (including bar jobs) = lots of people will, purely for the money, hold up their hand & shout “me, me, pick me!”

Those with an aptitude & proven (to themself) ability to work in a pub will always apply to a pub if they are needing a job. The numbers of these suitable people are static. In good times (like now) lots of these people have no need to rely on their barkeeping skills.

The volume of applicants for my bar jobs has been in decline over the past few years. It was once several highly suitable ladies each week dropping of a resume, and going onto the “waiting list” for a job; to me now taking people sight unseen from as far away as New Zealand or South Australia via a phone interview.

Despite extensive (& expensive) local advertising by myself and my competitors there has not been a local applicant for a bar job for over 12 months. It has been 3 years since there has been sufficient local applicants to fill all local bar vacancies.

Offering high wages means I get SOME applicants. But do no look at this in isolation, for simultaneously I am advertising far afield. By offering higher wages I am attempting to lure people from afar into coming to my place to work.

I am getting people, but they are not any better than I used to get.

I am not implying any “solution”, nor am I implying that paying higher wages is an extravagance. There is a floor price for labour in this country, so at no time have I ever paid “low” wages. However I can promise you that if I did not have to pay high(er) wages I would not.

There is NOTHING demeaning about bar work. It is honest labour, performing a function which is in demand by the employers and is meeting a need of the shopping public. ANYONE who feels their job here is “demeaning” has no place in the operation, and I will relieve them of their burden of employment before their attitude infests the place and harms anyone.

Speaking of which, you better adjust your attitude, fast, because as rapid as I am to sack someone who believes their job is demeaning, I move more quickly to evict (ie, to BAR) a punter who indicates a belief that bar staff are performing demeaning work.

If you believe your profession has more gentility than mine, or give a word or sign to indicate that you are better, then you’ll be promptly losing a fair bit of your dignity and self-esteeem when you land bum-first on the footpath!

I pay exeptionally well only for work which is done exceptionally well. Those who don’t perform are paid what they are worth, or would be except for the intervention of the Australian floor price for labour.

Bar staff have been paid up to $60,000 per year by me, although this is an exception; $50,000 would be more representative. This is for a fully kept position. I believe it compares quite well. That wage, apart from taxation and cost of work clothes, is available for discretionary spending.

How do your co-workers stack up for available discretionary funds?

How about you now stop shedding your credibility & dignity by ceasing to use inverted commas on the word “high” when referring to the high wages I pay?

Thanx again. You are being extremely informative. If you don’t mind me continuing to ask questions I’d like to pose a couple more.

Do you know what has happened to the locals? Are they finding all sorts of different types of employment? Or is there a specific alternative well suited to people with bar experience that they are moving to? There are alot more cafe’s and restaurants these days. Maybe these are providing the competing demand? Or have higher property prices changed the local demographics so that the bar staff have moved somewhere else?

And are you in a wealthier area like the northern beaches in Sydney? I have noticed that in good economic times the local unemployment rates in areas like these gets to almost literally zero. And commuting to places like these from higher unemployment areas can be quite difficult.

It sounds like losing local applicants is the worst part. I imagine local workers would have a bit of synergy. I guess they would get on with the customers better, which would be good for you and make their job more enjoyable. The shorter commutes would make it easier to get them on shift at short notice. If you are unable to get locals then I guess you would have to offer substantially higher wages to make up for the extra commute time while still having all the downsides of workers coming from further away.

Clearly, I can’t take issue with most of your attitudes as an employer (although I do take issue with your rationale for opposing minimum set standards of wages and working conditions), so I apologise if I have caused you to draw any implication that you are exploitative or unfair to your own workers.

And you are correct, there is nothing inherently demeaning about bar work, so my apologies again.

Nevertheless, I think ‘demeaning’ would be a fair word to use to describe situations where employees are not accorded due respect by their employers, or by the members of the public, or not remunerated fairly for their hard work, and this situation, even before the introduction of the new Industrial legislation, was far more widespread, including within the hospitality industry, than many here are prepared to acknowledge, as shown in Elisabeth Wynhausen’s “Dirt Cheap”, and from my own personal experience.

James: My “rationale for opposing minimum set standards for wages and working conditions”? Not sure what you mean. I have stated that a floor price applies to the price of labour. Like anything which is subsidised or has a high floor price, producer inefficiency becomes entrenched, especially amongst those whose product is in such condition that it would be unmarketable without the artificial legal protection.

SATP, I learned about this proverb from a person who comes from a business family that was successful for several generations in the past and continues to be successful. It came up in conversations about running a business. While it may not be too difficult to interpret it in the context of an owner-managed enterprise, it is a bit tricky when there is a separation of ownership from control. But, since you never heard of this proverb, it may be best to treat it as a dead end.

SATP,
The variant of Ernestine’s proverb that I heard was (I think) “The fish rots from the head”. I took this to mean, in the context, that she might be suggesting that rather than “blame the workers” you might indulge in a bit of introspection.

I do not mean this to be offensive, and I am sure Ernestine would not wish to be gratuitously offensive either. In fact while I find much I don’t agree with in your posts, I do find them often interesting and well worth reading.

Are there things you could do differently/better that would attract and retain the staff you want? Do your advertisements convey accurately what you want from your staff? What do you offer in return, apart from the pay?

If what you have tried isn’t working then maybe you need to try something else.

What has happened to locals? Some are still working for me. However transients and itinerants are kept away by the price of housing, which has skyrocketed to the point where a person holding down a $30,000 p.a. job is unable to afford to rent.

The staff procurement predicament I am in is shared by EVERY business in town. Not just the other hospitality businesses, but the dress shops, law firms, motor dealers, accountancy firms, the banks, the police, building trades, electricians, the medical professions, & so on.

Yes, there are cafes & restaurants here, however they are not able to offer the job security which hotels do. Nor can they offer the hourly rate, or the sheer volume of full time work which pubs do. They have no hope of attracting pub staff.

Perhaps I should revisit one of my comments from my previous but one post. Jobs here are fully kept. For you yokels from the big smoke, that means the staff are housed & fed. There is no commuting, unless you count walking down the stairs to be commuting.

I am in a remote/regional area of Queensland. There is no commuting. Any office worker in this town who gets out of bed at five to nine will not be late for work, there isn’t any traffic or distance to travel.

But yes, the district is quite wealthy. There are kids here who are the 2nd generation to never have performed household or houseyard chores. This lack of instilled work ethic/instilled experience of drudgery makes the younger generation of little princes/princessess almost impossible to employ.

Do locals get on with the customers better? Yes, sometimes.

The benefits/disadvantages of employing locals are perhaps better dealt with in another thread, but you probably can guess most of them already.

I prefer to employ locals for many reasons. Among these reasons are availability and stability. Though experience has taught me there is no guarantee of either of these.

Having a “floor price” establishes some uniformity across the whole industry, which, in theory at least, gives all workers a decent minimum standard of living. It may seem to you as if it has caused inefficiency to become entrenched. However, at least, if the laws are respected and enforced, you are paying roughly the same costs as other employers.

Without these minimum standards, particularly with our globalised economy, a ‘race to the bottom’ would be a practical certainty and many more Australians would become working poor. They would be literally living to work. There is also a tendency where wages are low, for some employers not to manage their workers well.

I once lived in an Australia, in which practically everybody, who was prepared to put in a decent day’s work – that is without having to work non-stop from the minute he/she walked in the door, and being allowed to have his/her mind wander from the job from time to time and be able to stop and have the occasional chat with fellow workers – could expect at least an adequate standard of living including. If one was prepared to work hard and become very proficient at one’s job, one could have expected to have done very well.

Today, that has clearly changed, in spite of economists being able produce figures that purportedly show that our standard of living has more that doubled since the 1960’s. For many workers, being prepared to work very hard for long hours and being very good at their work has become the very minimum requirement for simply being able to keep one’s head above water.

What may appear to some employers to be high costs of labour are really only what is necessary for a barely dignified life. This is because many costs of living increases have not been properly factored in to the cost of living indexes, the most glaring of these being housing costs.

These increases in the costs of living, borne principally by workers, are a symptom of the underlyling inefficiencies, which, I argue, have been brought about by decades of neo-liberal economic so-called ‘reform’ coupled with population growth. If the new Industrial relations laws ever become properly entrenched, workers will end up paying even more for the inefficiencies of neo-liberalism.

James,
Is there a reason you seem to regard the future with dread? Does your regard of the past as being better than the present represent a strongly conservative bent?
I look at the world we are in today, compare it to the past, and see progress. Less pollution (granted, except for carbon dioxide, which has only recently been regarded as pollution), more freedom in the labour and other laws (again, too much regulation still, but we are not as restricted as the past) and, despite your contention, more wealth. I would also dispute that we are working more hours. We may be spending more time at work, but when we are home, we have more time than our parents did to spend with our children. I certainly spend more time with my kids than my Dad did, simply because I do not need to do as much around the house. I am also earning more and with better job security – becasue I know that if I loose my job finding another would be simple.
I would encourage you to read this paper and establish a critisism of it, if you can. Extract:

We document that a dramatic increase in leisure time lies behind the relatively stable number of market hours worked (per working age adult) between 1965 and 2003. Specifically, we document that leisure for men increased by 6-8 hours per week (driven by a decline in market work hours) and for women by 4-8 hours per week (driven by a decline in home production work hours). This increase in leisure corresponds to roughly an additional 5 to 10 weeks of vacation per year, assuming a 40 hour work week. We also find that leisure increased during the last 40 years for a number of sub-samples of the population, with less-educated adults experiencing the largest increases.

Granted, this is for the US, but I believe the trends would be similar here. If it is wrong, please point to an article in a peer-reviewed journal.

Andrew, I wouldn’t get too excited about “peer reviewed” being a marker of quality. It doesn’t really mean that much. Also, the paper you cite is just a working paper, which means it hasn’t been through peer review anyway.

From a quick read, the benefit he seems to be endorsing – increased leisure – is enjoyed more by the less educated. Thus I suspect he’s misinterpreting the effects of reduced employment. If so, the paper inadvertently supports James’ position.

Another benefit of the new work environment has appeared at Eddie McGuire’s Channel 9. Seems they’ve lost news and current affairs boss Mark Llewellyn after giving him a new contract at half pay and without an office.

Tony – from the Economist’s review of the paper – “And that is not just because unemployed high-school drop-outs have more free time on their hands. Less educated Americans with jobsâ€”the overstretched middle class of political loreâ€”do very well”.
The reason I asked for peer reviewed is that James has a habit of referring to books, rather than academic papers. Some of the books on the subject (on both sides of the argument and I am not saying that either way in regards to any of James’ references) should be in the fiction category. At least published papers have to comply somewhat with the requirements of the publisher. In this case the Fed is fairly reputable.

(I could write volumes on this one.) Briefly, because our destiny is largely in the hands of people who seem to be complete fools. They are, almost literally speaking, increasing the speed of the Titanic upon which we are all passengers with the ocean ahead strewn with icebergs to suit the ship’s owners who wish to set a new record for crossing the Atlantic.

Queensland’s destiny is largely guided by Labor Premier Peter Beattie and Brisbane’s Liberal Lord Mayor Campbell Newman, who, in spite of our dams threatening to run dry, threatened power blackouts, health crises and traffic congestion, want to further increase South East Queensland’s population, whihc has already increased by 1,000,000 in the last 15 years by a further 1.1 million by 2026.

Only last Sunday, when during an interview about Brisbane’s water crisis, Peter Mares on ABC Radio National’s “National Interest” put to Campbell Newman, whether in view of the threat of Queensland’s water running dry, we should begin to discourage interstate migration into Queensland, he responded :

I don’t think so …

Last December 8 the Queensland Government placed the following advertisment in the Courier Mail :

Queensland’s population will reach four million people tomorrow, Friday 9 December.

If you are visting or thinking about a move to Queensland, you will already know we are the nation’s engine room, Our population growth is only rivalled by our economic and employment growth. We now account for 19.5% of Australia’s population.

Tomorrow’s mile stone and our economic success reflect that Queensland is the place to invest, work, live, work and play.

…

To all Queenslanders, I urge you to warmly welcome our new arrivals.

Peter Beattie MP
Premier and Treasurer

Now he tells the residents of the Mary Valley and Rathdowney, that if their farms aren’t flooded, their won’t be enough water for the population of South East Queensland!

How could I possibly not worry about our future with people like Campbell Newman, Peter Beattie and John Howard in control of our country’s destiny?

Have only read the abstract, so far. If it is true of America, it is not true of Australia. We have close to the highest (if not the highest) number of working hours in the developed world. Will get back to you.

I would also dispute that we are working more hours. We may be spending more time at work, but when we are home, we have more time than our parents did to spend with our children. …

I suggest you listen to “Life Matters”, on ABC Radio National today, in which the length of working hours in Australia is discussed. As you are in Western Australia, you may still be able to hear the first broadcast at 9AM. It is repeated after the midnight news in the Eastern states.

All that I have written above has been utterly confirmed by both the program guests and callers : that Australians are working longer and more intensely than almost any other OECD country.

Does the availability of labour saving devices offset the additonal hours? In your case, possibly, but in the case of most, I very much doubt it, and this is certainly not my experience. Most of the devices that save me from domestic labour, with the possible exception of the micro-wave oven were already around before the neo-liberal economic ‘revolution’. Most other gizmos these days are more trouble and expense than they are worth.

Outside our already extended working hours, time is also wasted by the vast increase in the complexity of our lives.

The fact is that the promises of neo-liberalism have not been delivered. The prosperity that many supposedly now enjoy has been greatly exaggerated by the gravely inadequate GDP measures cited by economists, and the real reduction in both incomes, and quality of life for, at least, a very large minority has not been properly taken into account.

It is time that all the claims of neo-liberalism were well and truly put under the microscope.

The plural of anecdote is not evidence. Read the paper I linked to and come back with evidence – not the opinions of others.
People everywhere believe they are working harder than their parents, just as their parents believe they worked harder than their children do now. Look at the facts, not talkback radio.

The anecdotal evidence from a large number of callers to “Life Matters” today, which you dismiss, is totally consistent with my own experience and nearly everything else I have ever heard on the subject.

Even if we accept what is written about in the document about America, I don’t see that is relevent to Australia.

In any case, It seems as if Patrick Lion of Brisbane’s Courier Mail newspaper hasn’t read the document either.

I will continue to try to read the document, but I am not impressed with what I have read, so far.

As I pointed out above, the Real Estate Institute of Queensland doesn’t seem to believe, either, that our leisure hours are increasing.

It’s plain to me, that for many, leisure time has been drastically eaten into since the sixties, because of

1. Increased working hours
2. Increased Intensity of work
3. Less opportunities for on-the job training. More training done outside working hours at universities and TAFE colleges.
4. More commuting time, more time spent finding parking spots.
5. Much more additonal work that is necessary in order to find jobs. Writing resumes, addressing selection criteria, attending interviews, etc.
6. Time spent seeking accommodation and moving house due to shortage of stable secure housing stock.
7. More paperwork demanded by the Government from all of us, either to get on with our lives or to earn income.
8. Requirements to deal with matters such as superannuation and private health insurance.
9. Additional time (and expense) necessary to safeguard our possessions against theft.
10. Time spent procuring and using child care services.
11. Time spent by parents driving children to and from school and leisure activities because of a perception of greater danger to them.
12. etc.

James,
The Australia Institute is hardly an unbiased paragon of exellence. Look at the list of directors and have a think about which barrows it is in their interests to push. Conflicts of interest occur at all the points of the political compass, not just what is normally termed “the Right”.
I would maintain that the Australian experience is not too different to the US. In the case od Australia, the data is simply not available, at least as far as I know. If so, standard procedure is to use a proxy with a good data history – in this case the US study, as I maintain it would be a good proxy. If you can disprove the proxy link, let me know. I am sure we would all be fascinated.

There is plenty of basis to what I have written including “Growth Fetish” by Clive Hamilton, “Dirt Cheap” by Elisabeth Wynhausen, much reading of newspapers and online material, listening to the Radio, personal experience, experiences of friends and acquaintances. (I have even read a good deal of Peter Saunders’ wretched “Australia’s Welfare Habit”, of which I am sure you would approve, and found many holes in his case.) To suggest that a study from the US (which, in any case, appears to be in contradiction with what is written in “Nickel and Dimed” by US journalist Barbara Ehrenreich) should carry more weight than all of this, is ludicrous in my opinion, and I suspect most other site vistors will agree with me.

As I have already said, although I try my best, I don’t employ half a dozen research assistants so I am not able always to cite reliable source for every opinion I offer. Nevertheless, I honestly believe all of what I write to be true, and if it was not, I expect that you or someone else would be able, before long, to produce documentary evidence to prove what I have written is wrong.

My point about living standards is very important in Australian politics, because that has proven year after year to have been John Howard’s trump card. It doesn’t seem to matter how much he lies, acts destructively on the international stage, neglects our environment, swindles and defrauds ever larger sectors of the Australian population, as long as he can convince a majority of the population that they are materially better off because of these policies he seems able to get over the line at election time.

I believe that I have shown in my posts that the picture that Howard has been able to feed to the majority of the Australian population thus far is far from complete.

James,
I am trying to find the substance in your comments. You provide anecdote, opinion and books written from a particular point of view.
I provided anecdote (my own), opinions (I take it you do not disagree that opinion has been provided), books (Lomborg, for example) and research in credible journals. I believe myself correct and am waiting for any ‘killer’ evidence. I see none.
I look at Australia and see those rising living standards, a better environment (and more respect for it amongst the population), better jobs more time away from the office doing the things we want to do, better general health, more material wealth and longer lives. I cannot see the substance in your comments.
I do not have a team of researchers either. Or even one.

You say you are waiting for any “killer evidence” to destroy your argument about the relevance of a US publication for Australia.

I don’t think I want to provide “killer evidence” . I only want to point out the obvious fundamental flaw in your argument.

You argue:

a) “I would maintain that the Australian experience is not too different to the US. In the case od Australia, the data is simply not available, at least as far as I know. If so, standard procedure is to use a proxy with a good data history – in this case the US study, as I maintain it would be a good proxy.”

b) The the US data comes from a refereed and high quality journal.

I say:

It is news to me that there is a ‘standard procedure’ for substituting data. In academia, the substitution of data would be called ‘academic misconduct’ (worst possible offence).

However, I don’t wish to bother you with academia. I understand you are an accountant. So I shall try to present my argument with reference to accounting – for your convenience.

Your argument is akin (equivalent) to the case where corporation (A) publishes financial statements (balance sheet, profit and loss account, statement of cashflows). Corporation (B) does not collect its own financial data to produce reports. Corporation (B) employs Andrewy Reynold’s methodology. That is, Corporation (B) says: KPMG, a reputable accounting company has certified the accounts of Corporation (A) and we are similar to Corporation (A). Therefore we maintain that the financial data for Corproation (A) is relevant for us, corporation (B).

Andrew, if you tell me that you are not only an accountant but a consulting accountant or an auditor, and you don’t see that the Andrew Reynold’s methodology of substituting data, as you proposed in your exchange with JS, is fatally flawed, then I think there is a problem which is totally outside my area of expertise.

In case it is not obvious, item b) is superfluous. Its role in your argument is to obfuscate. That is, your argument involves a substitution of lack of quality in the application of the content of the publication for quality of the publication (assuming you have a point about quality; the term assume means it is not known to be true). It is the equivalent of an extreme form of ‘creative accounting’, namely to confuse ‘assets’ with ‘liabilities’ or to do what Enron did (and Enron did the equivalent of what a real estate agent would do if sales prices would be recorded as commissions; ie categorical confusion).

Ernestine,
What I am saying is akin to standard stock market theory. I am trading in shares in companies in a particular industry. Company A, a nickel mining company, announces stellar results, beating market expectations. Company B, also a nickel miner, is yet to release results, but are similar in structure to Company A. Do I go and buy Company B’s shares in the expectation that their results will be similar to Company A’s? You betcha.
I agree that, if you substituted data without disclosure and without basis it would be misconduct – but surely use of such a proxy in formulating an hypothesis would be acceptable? My hypothesis (which, due to lack of research funding, I cannot follow up at the moment) is that the US conditions would at least partially, and possibly wholly, be replicated here. We have similar economic systems, are similar in ethnic makeup and many of the same global and technological forces have been acting on us.
As with the companies example above, I think the US is a reasonable proxy for Australia. I certainly here enough complaints (many on this site) that we are too similar to the US. If you have evidence to the contrary, let us know.

No, Andrew, creating a new problem in addition to an existing one does not constitute a solution for the existing one.

In steps:

1. “What I am saying is akin to standard stock market theory. I am trading in shares in companies in a particular industry. Company A, a nickel mining company, announces stellar results, beating market expectations. Company B, also a nickel miner, is yet to release results, but are similar in structure to Company A. Do I go and buy Company Bâ€™s shares in the expectation that their results will be similar to Company Aâ€™s? You betcha.”

I don’t know where you get your ‘standard stock market theory’ from. To the best of my knowledge, there is no ‘standard stock market theory of the sort you describe. Prove me wrong.

What you describe is your personal formation of expectations which you use to make a financial investment decision. Other people are known to form their expectations on the basis of their opinion of the members of the board (indeed, you have used your opinion regarding the members of the board of some institution which published something, referenced by JS, which you did not like in an attempt to discredit the publication). I have no objections to any of your methods of making your own decisions. I simply would not buy your advice.

2. Your analogy is fataly flawed. The crucial difference between your private financial investment decision making example and the original one (your argument with JS, which is the subject of my analogy), is that in contrast to your private financial investment decision making example, you have no information which would allow you to be confident that you can check your private theory (hypothesis) against reality. That is, your private financial decision making rule rests crucially on the knowledge that both corporations (A) and (B) are forced by law to publish financial accounting data but there is a time lag between the publication of financial accounting data, which is not ruled out by law. (It also rests on the assumption that relative to each other, corporation (A) and corporation (B) have not changed during the reporting period. But this is not crucial to my point here). By contrast, in the original problem (that which is the subject of my analogy) you do not have the knowledge that the corresponding data for Australia will be published within ‘the accounting period’. Indeed, you acknowledge that you don’t have any comparable data from the past or the present. Hence, my analogy to ‘creative accounting’, as described, stands.

Ernestine,
1. If you do not see this in your examination of the markets, I suggest you have another look. Each of the firms within an industry show strong (but not perfect) price correlation with each other. The correlation is not perfect, as I correctly pointed out earlier and is dependent on other factors, but good results in the first firm to report (or give guidance to the market) is a strong buy signal.
2. On this, we will have to disagree. Simply because one firm does not publish data does not mean that they have not had a good year, just as because the US has more data on increased leisure does not mean that Australia has not had that leisure increase – it only means that there is no data. Absence of evidence does not constitute evidence of absence. I have indicated why I believe that there would be a correlation between Australia and the US in this. Can you indicate whether you believe that the correlation would be low, zero or even negative and if you do, why you do?